Economic Logic, Too

About Me

I discuss recent research in Economics and various events from an economic perspective, as the name of the blog indicates. I plan on adding posts approximately every workday, with some exceptions, for example when I travel.

Wednesday, August 18, 2010

It is sometimes puzzling when someone in power relinquishes it, especially when this person can take advantage of institutions to stay in power. One such case is when males, who were the only ones to have property rights, gave property rights to females. Why would they allow this, given that males had monopoly on votes and government?

Raquel Fernández comes up with an elegant story. The important trade-off is between appropriating all rights to oneself and how descendants, who include daughters, get. Looking at history, there are two major effects. The first is a decline of fertility, which under a patriarchal system allows fathers to bequeath more per son. But this increases the disparity between sons and daughters, and thus reduces the advantage over equal distribution, through the concavity of utility. The second effect comes from the general increase in wealth, with a similar logic.

In both cases the father becomes better off sacrificing some wealth to his wife in order to force sons-in-law to be more generous with his daughters. The prediction is then that lower fertility and more advanced economic development both force earlier adoption of female property rights, something Fernández finds across US states, which have adopted such laws at various times between 1846 and 1920 (and four states still missing by then). And the theoretical prediction is obtained without assuming changes in altruism towards children, which I find remarkable.